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Questions and Answers
The return that a person gets on a certificate of deposit is usually less than the return on a money market account.
The return that a person gets on a certificate of deposit is usually less than the return on a money market account.
False (B)
Consumers have the right to have problems corrected and receive payment for false claims and poorly made goods.
Consumers have the right to have problems corrected and receive payment for false claims and poorly made goods.
True (A)
Banks and credit card companies check a person's financial history before deciding whether or not to offer credit to that person.
Banks and credit card companies check a person's financial history before deciding whether or not to offer credit to that person.
True (A)
The Better Business Bureau issues warranties on products that consumers buy.
The Better Business Bureau issues warranties on products that consumers buy.
U.S. government bonds are very safe investments.
U.S. government bonds are very safe investments.
What is the money that a person has after paying taxes known as?
What is the money that a person has after paying taxes known as?
How does a warranty protect a consumer?
How does a warranty protect a consumer?
What makes you more likely to buy on an impulse?
What makes you more likely to buy on an impulse?
What U.S. president proposed that consumer rights be recognized?
What U.S. president proposed that consumer rights be recognized?
What are the three basic parts of a budget?
What are the three basic parts of a budget?
What type of person is most likely to have a budget deficit?
What type of person is most likely to have a budget deficit?
What is a benefit of credit?
What is a benefit of credit?
The most common source of credit today is a?
The most common source of credit today is a?
What savings plan is most likely to have the highest rate of return?
What savings plan is most likely to have the highest rate of return?
One disadvantage of a certificate of deposit is that?
One disadvantage of a certificate of deposit is that?
When a person buys a share of stock, that person is?
When a person buys a share of stock, that person is?
What is the financial tool that automatically deducts money from your bank account when you make a purchase with it?
What is the financial tool that automatically deducts money from your bank account when you make a purchase with it?
What type of savings pays high interest and allows you to write checks against deposited money?
What type of savings pays high interest and allows you to write checks against deposited money?
The amount you initially deposit into an account is the?
The amount you initially deposit into an account is the?
Give one step to make a budget.
Give one step to make a budget.
What is meant by expenses?
What is meant by expenses?
What is income?
What is income?
What is collateral?
What is collateral?
What does it mean to charge?
What does it mean to charge?
What is surplus?
What is surplus?
What is risk in financial terms?
What is risk in financial terms?
What is a mutual fund?
What is a mutual fund?
What is a debit card?
What is a debit card?
What is a time deposit?
What is a time deposit?
What does it mean to save?
What does it mean to save?
Name five consumer responsibilities.
Name five consumer responsibilities.
Study Notes
Financial Concepts and Definitions
- Returns on a certificate of deposit are generally lower than those on a money market account. (False)
- Consumers are entitled to have issues resolved and compensation for misrepresented products and poor-quality goods. (True)
- Banks and credit card companies evaluate an individual's financial history when deciding on credit extensions. (True)
- The Better Business Bureau does not issue warranties on purchased products. (False)
- U.S. government bonds are considered very safe investments. (True)
- Disposable income refers to the money remaining after tax obligations.
Consumer Protections and Rights
- Warranties assure consumers that faulty products will be repaired or replaced.
- Credit can increase the likelihood of impulse purchases.
- John F. Kennedy was the U.S. president who advocated for the recognition of consumer rights.
Budgeting Basics
- A budget consists of three fundamental parts: income, expenses, and balance.
- A budget deficit occurs when expenditures exceed income, indicative of overspending.
- Benefits of credit include the ability to pay for products or services at a later date.
Credit and Savings
- Credit cards are the most prevalent form of credit today.
- Stocks generally provide the highest potential rate of return among savings options.
- A certificate of deposit has the disadvantage of not allowing early withdrawals.
- Purchasing stock makes the buyer a part-owner of the respective company.
Banking and Transactions
- Debit cards deduct funds directly from a checking account upon purchase.
- A money market account offers high-interest rates and allows check-writing against deposited funds.
- The initial amount deposited in an account is known as the principal.
Financial Management Strategies
- Budgeting steps include recording all earnings and expenditures meticulously.
- Expenses refer to money spent on goods and services, while income encompasses all earned or received money.
- Collateral is the property pledged as security for a loan.
- Charging refers to making payments with a credit card.
Market Dynamics
- Surplus occurs when the supply of a good or service exceeds consumer demand.
- Risk in investments represents uncertainty regarding profit or loss and the potential threat to the principal amount.
Investment Vehicles
- A mutual fund is an investment firm that sells shares and uses the funds to purchase stocks and bonds from other companies.
Saving Practices
- Saving involves preventing excessive spending or usage of available funds.
Consumer Responsibilities
- Key consumer responsibilities include seeking assistance when needed, evaluating advertising critically, making justified complaints, comparison-shopping, and considering both brand-name and generic products.
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Description
Test your knowledge on the key concepts of Chapter 18 in Personal Finance. This quiz covers consumer rights, banking relationships, and investment returns. Challenge yourself to differentiate between true and false statements regarding financial products.
